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President Trump said his advisers would meet with lawmakers on Tuesday to discuss a potential payroll tax cut and other relief measures as fears of a recession mounted.
WASHINGTON — President Trump has spent the past several weeks dismissing concerns about any economic effects from the coronavirus and insisting that American companies and consumers are in no danger.
On Monday, after stock markets suffered their worst single-day decline in more than a decade, Treasury yields reached new lows and oil prices plummeted, Mr. Trump said he was ready to act.
The president said the White House would unveil “very dramatic” proposals to help protect the American economy from the coronavirus, including financial help for workers who don’t get paid sick leave, tax cuts and targeted relief for industries battered by the virus, including cruise lines, airlines and hotels.
The overture sets up tense negotiations with Congress, just weeks after the president was impeached by House Democrats and less than a year from Election Day. Democrats remain deeply critical of Mr. Trump’s efforts to contain the virus and have suggested, at least for now, that they will move cautiously to help bail out the president’s handling of the crisis.
Democrats have expressed openness to certain measures of stimulus — like paid sick leave and increased spending on safety-net programs like unemployment insurance and food stamps — that could provide the building blocks for a deal with the president. And Mr. Trump’s efforts could be aided by the fact that federal borrowing costs have fallen to rock-bottom rates as skittish investors in recent days have piled into safe U.S. government debt.
Mr. Trump’s decision to seek fiscal help amounts to concession by a White House that has ignored increasingly ominous predictions of the virus’s economic effects, which have ranged from dramatically slowing growth in the United States to plunging the economy into recession.
That threat was compounded over the weekend by Saudi Arabia’s announcement that it would ramp up oil production, sending prices into a downward spiral and raising the threat of layoffs and shelved investments in the American oil industry.
Mr. Trump and his aides had played down the economic threats as recently as Monday morning, when the president celebrated falling gas prices as “good for the consumer” while blaming the stock plunge on a combination of Saudi Arabia, Russia and “fake news.” He also suggested fears about the virus were overblown, saying more people have died from the flu than the new coronavirus. “Life & the economy go on,” he tweeted.
By Monday evening, after the stock market fell nearly 8 percent — its steepest losses since the 2008 financial crisis — the president had changed his tone, conceding that those dire economic warnings could no longer be ignored heading into an election in which he planned to tout the strength of the United States economy.
“This was something that we were thrown into, and we’re going to handle it,” Mr. Trump said.
He then tried to reassure investors that the economy was resilient.
“We have a very strong economy,” he said. “This blindsided the world.”
White House officials have known for more than a month that the virus posed a threat to public health and economic growth in the United States, but they have consistently said the economy would not need additional support to weather it. When asked about any economic fallout, Mr. Trump has put the onus on the Federal Reserve, saying it should cut interest rates and do more to stimulate growth.
But investors have largely shrugged off the Fed’s efforts. An emergency rate cut announced last Tuesday did little to mitigate the damage, as investors digested the economic ramifications of a virus that has shuttered factories, canceled travel and quarantined workers.
A growing chorus of economists, many of them veterans of President Barack Obama’s administration, have called for Mr. Trump and Congress to further support growth by injecting hundreds of billions of dollars into the consumer economy. Mr. Trump’s team initially rejected such calls.
Any large spending increases or tax cuts will require a deal with the Democrats who control the House and can block most legislation in the Senate. Leading Democrats gave Mr. Trump’s new proposals a cool reception on Monday evening.
A Democratic official on Capitol Hill said that party leaders did not like the idea of bailing out individual industries, like airlines, with targeted tax cuts. A spokeswoman for House Democrats on the Ways and Means Committee said they had not heard directly from the White House about the proposals before the news conference.
“What was glaringly missing from President Trump’s news conference was how he is actually going to combat the spread of the coronavirus and keep the American people safe,” Senator Chuck Schumer of New York, the Democratic leader, said in a statement. “It seems President Trump is more focused on the stock market than addressing this pandemic.“
Mr. Schumer called on Mr. Trump to propose a package that included “ensuring tests and treatment are both available and affordable to all who need it and paid sick leave for all Americans workers, among other people-focused initiatives.”
After Speaker Nancy Pelosi convened a meeting Monday evening with her top committee chairman to discuss the Democrats’ response, Representative Steny H. Hoyer of Maryland, the majority leader, emerged to throw cold water on Mr. Trump’s payroll tax cut, saying it was not “what we need right now.”
“What the economy needs right now is some stability and confidence that we’re addressing the issue that is undermining the economy,” he said. “The president’s answer for almost everything is a tax cut. We think we need to make sure that people, and health facilities and insurance companies and others, have confidence that they’re not going to be bankrupted by this.”
Vice President Mike Pence said on Monday that the relief measures proposed by the White House would ensure that Americans do not have to worry about losing their jobs or missing paychecks because of the coronavirus.
Mr. Trump’s comments came after he met with his economic advisers on Monday afternoon. Treasury Secretary Steven Mnuchin and Larry Kudlow, the director of the National Economic Council, are expected to present the stimulus proposals to Republican lawmakers on Tuesday.
Mr. Mnuchin said at the briefing that he had been having daily conversations with Jerome H. Powell, the chairman of the Federal Reserve. He insisted that the administration would use all tools at its disposal to ensure that the United States economy was in good shape a year from now.
“This is not like the financial crisis,” Mr. Mnuchin said. “This is about providing proper tools and liquidity to get through the next few months.”
The Treasury secretary also raised the possibility of directing the Internal Revenue Service to provide tax relief to companies that are affected.
“We’re looking at alternatives at the I.R.S.,” Mr. Mnuchin said, noting that tax payments would soon be due.
A Senate Finance Committee spokesman, Michael Zona, said on Monday morning that its Republican chairman, Senator Charles E. Grassley of Iowa, was “exploring the possibility of targeted tax relief measures that could provide a timely and effective response to the coronavirus.”
He added, “Several options within the committee’s jurisdiction are being considered as we learn more about the effects on specific industries and the overall economy.”
Sheryl Gay Stolberg, Nicholas Fandos and Emily Cochrane contributed reporting.